Hope for a sequestration compromise?

WASHINGTON — In his remarks at the National Press Club on Tuesday, Senate Armed Services Committee Chairman Carl Levin, D-Mich., said that Republicans would have to back off their inflexible stance on new taxes if Congress wants to avoid $500 billion in automatic defense cuts scheduled for next year. A few hours later, one of GOP his colleagues from the committee suggested that could already be in the works.

In an interview with ABC News, Sen. Lindsey Graham, R-S.C., said he’d be willing to reassign some money from closing tax loopholes to debt-reduction plans. That goes against conservative groups’ insistence that any tax reform be used to reduce taxes, dollar for dollar.

“If you eliminated a tax cut that goes to just a handful of people, and you put some of that onto the debt, most Americans would be happy with that,” he said. "I just think that makes a lot of sense. And if I'm willing to do that as a Republican, I've crossed a Rubicon."

When asked if the idea violated anti-tax promises, Graham replied that “we’re so far in debt, that if you don’t give up some ideological ground, the country sinks.”

Of course, Graham’s comments aren’t an indication that enough Republicans are willing to compromise to produce a viable solution to sequestration, or that Democrats will agree it goes far enough. Graham said any such moves would need to be accompanied by fundamental changes to entitlement programs such as Social Security and Welfare, a tough sell for many Democrats.

But Graham also acknowledged that his Republican colleagues will also have to make concessions.

“I think, over time, the Republican party’s position is going to shift,” he said. “It needs to, quite frankly. … We need more revenue.”